| Category | Date | Subject |
|---|---|---|
| Car Warranty | 11/07 | Warranty Cover Price Doubles at Franchised Dealers |
| Car Warranty | 11/07 | Over 1 Million Cars Will Break Down Just Outside of Warranty |
| Debt & Motgages | 11/07 | The Credit Crunch |
| Car Warranty | 11/07 | North South Divide as Garage Charges Top £183 an Hour |
| Energy | 11/07 | Avoid the Winter Bill Chill |
| Energy | 10/07 | Top 10 Tips for Saving Money on Energy |
| Prepaid Cards | 10/07 | ABC’s of Prepaid Cards |
| Energy | 10/07 | Barriers to Switching Energy Supplier |
| Credit | 10/07 | Consumer Credit Crunch |
| Energy | 10/07 | Consumer Prices are Standing Still – Why? |
| Energy | 10/07 | Lock in Savings Before the Winter. |
| Energy | 10/07 | Why do I Have a Paper Bill? 10 Reasons why you Shouldn’t. |
Articles supplied by Xelecta plc, Warranty Direct Ltd and Brightside Plc
After 6 years of pushing though energy price increases, which have seen the average annual gas and electricity bill for the UK consumer reach £1,000 for the first time, UK gas and electricity price are finally falling back.
This is the story that the supplier would like us to believe. British Gas, npower, Powergen and Scottish and Southern Group (the company that owns the Southern Electric, Swalec and Scottish Hydro brands) announced seemingly steep price-cuts for their customers in 2007, indicating a price-cutting war between the major utilities.
Unfortunately it has now become clear that no price war has happened or is imminent. Wholesale gas and electricity prices have indeed fallen significantly, yet consumers have not benefited. Instead, UK energy suppliers are using lower wholesale energy prices in order to build up their profit margins at the expense of the UK consumer.
The table below illustrates how supplier margins have become inflated in recent months.
| Spot Wholesale price* | UK consumer price** | Apr-07 | Apr-06 | % Difference | Apr-07 | Apr-06 | % Difference |
|---|---|---|---|---|---|---|
| gas(p/kWh) | 0.54 | 1.8 | -70% | 2.52 | 2.52 | 0% |
| electricity (p/kWh) | 1.78 | 4.59 | -61% | 9.81 | 9.69 | 1% |
|
*Source APX/FT **Average unit price based on 3,300kWh standard electricity usage / 20,500 kWh gas usage, averaged across all British Gas, EDF Energy, npower, Powergen, ScottishPower, Scottish-Southern, standard prices in force April 2006 and April 2007 respectively. |
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The wholesale price for gas and electricity shows that suppliers are able to purchase gas and electricity at 65% less than in April 2006, yet UK consumers are today still paying the same rates they paid a year ago. The financial benefit of falling wholesale prices has completely bypassed consumers and gone straight into the pockets of Utility company shareholders.
Where does the consumer stand?
Consumers are right to demand and expect steep cuts, simply because they have yet to have one. On the other hand, suppliers’ ability to resist those cuts means that the market is not competitive. It is quite conceivable and desirable that the demonstrable lack of transparency in supplier pricing will soon lead to a government competition enquiry.
The consumers’ role in all of this should do what they can to make the market as competitive as it can be – this means to vote with their feet and switch!
Suppliers do offer good deals although they typically hesitate to make these available to their existing customer base. There are some great deals to be had from reviewing and switching an energy supply, with savings easily as high as £172 for an average household.